Business News

Caretaker government prepares options for 2011 budget

Jan Fischer, photo: CTK The Czech government has taken the unusual step of working on an either or budget for 2011. Two versions of the budget are being drawn up to be ready for a right-wing or left-wing victor following parliamentary elections in the middle of next year. The first version should put the emphasis on cutting spending and the second on raising taxes. Czech Prime Minister Jan Fischer is not giving too much away at the moment but does expect that both versions will deliver a budget deficit that comes in lower than the expected 5.5 percent of Gross Domestic Product planned for next year.

Škoda Auto looks to develop downmarket saloon

Škoda Octavia The country’s biggest carmaker Škoda Auto is looking to develop a cheap family saloon car which could compete with the low cost Logan cars being produced by Romanian-based Dacia. Škoda’s board chairman Reinhard Jung says the company is looking to fill the gap in the market between its bottom of the range Fabia and its mid-range Octavia. He says the showroom price of the new model could start at around 260,000 crowns, around 15,000 US dollars.

Lawmakers reject lower tax of labour intensive businesses

Czech lawmakers appear to have scored an indirect tax own goal. This week they rejected a proposal to cut Value Added Tax on a series of labour intensive jobs such as hairdressing and bike repairs. The idea behind the cut was that this would save or even boost jobs in these sectors and help counter rising unemployment.

One of the arguments that the lawmakers used against the proposal was that it would already cut into the Ministry of Finance’s depleted revenue stream for next year. Ironically, the finance ministry was one of the main backers of the idea and a major force in getting the policy cleared for other countries across Europe.

Mineral water market leader faces multiple threats

The country’s biggest bottled water producer including flagship brand Mattoni is suffering from tough times. The cool summer and economic crisis dented what hitherto have been ever upward sales for Karlovarské minerální vody. Now the seller of around 70 percent of mineral water in the Czech Republic faces a battle on another front. The French-based utility Veolia — which manages municipal fresh and waste water services across the Czech Republic — is backing a campaign aimed at getting restaurants to offer tap water instead of mineral water. Its offer includes free carafes for restaurants who sign up to the campaign. The bottled water producer is looking to respond by launching sales of flavoured non-fizzy mineral water next year.

Nano textiles breakthrough sought for solar power

A Czech company which has pioneered the use of nanotechnology in textiles has started a joint venture which aims to make a breakthrough in solar power production. Elmarco has teamed up with Czech electricity giant ČEZ in testing whether solar panels composed from nano fibres can be more widely used than conventional ceramic panels and whether they can be produced cheaper. This could, for example, help to widen the use of solar power for example in lighting homes where current technology is ill adapted.